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US Services PMI Stokes Sell-Off

"If you don't study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards." – Peter Lynch 

 

HEADLINES

 

  • EUR/USD Forecast: Dollar surges on risk aversion
  • Reserve Bank of Australia tiptoes into tapering
  • Oil Hits 7-Year High, Then Plunges on OPEC Disarray
  • Gold firms near $1,800 level as U.S. bond yields drop
  • S&P 500 Falls on Fears Rapid Growth Nearing Peak
  • NZD and CAD are the cheapest G10 currencies – TDS

 

 

FOREX

 

 

EUR/USD Forecast: Dollar surges on risk aversion

 

 

The greenback appreciated against most major rivals, with the EUR/USD pair plunging to 1.1806 after flirting with the 1.1900 area earlier in the day…

The US published the ISM Services PMI, which resulted at 60.1 in June, missing the 63.5 expected. Markit published the final Services PMI for the same month, which was downwardly revised to 64.6 from 64.8. The poor figures added to the dismal mood, fuelling demand for the safe-haven dollar.

 

 

Reserve Bank of Australia tiptoes into tapering

 

 

In a closely watched monetary policy announcement, the Reserve Bank of Australia (RBA) made no changes to current monetary policy settings; however, did signal future modest steps toward less policy accommodation.

To that point, the RBA retained the 2024 government bond as its yield target, while it also extended and tapered its asset purchase program.

 

COMMODITIES

 

Oil Hits 7-Year High, Then Plunges on OPEC Disarray

 

Oil bulls thought they got more than they wished for from OPEC+: Not a barrel of additional output for August. Crude prices sank as speculators’ initial jubilation over OPEC+’s failure to agree on an August output hike due to Saudi-UAE disagreement turned into fears that the spat between the alliance’s two senior-most members could scuttle the year-old unity on production cuts.

 

Gold firms near $1,800 level as U.S. bond yields drop

 

Gold rose on Tuesday, bouncing above the key $1,800 level at one point, bolstered by a retreat in U.S. bond yields while investors watched for minutes from the Federal Reserve’s last policy meeting to gauge interest rate trajectory.

Benchmark U.S. Treasury yields hit a near two-week trough, boosting gold’s allure as it tends to lower gold’s opportunity cost.

 

STOCKS

 

S&P 500 Falls on Fears Rapid Growth Nearing Peak

 

The S&P 500 fell Tuesday, as sea of red washed over economically-sensitive stocks after plunging U.S. bond yields pointed to fears the reopening-led boost to the economy is nearing a peak.

The S&P 500 fell 0.8%, the Dow Jones Industrial Average slipped 1.09%, or 382 points, the Nasdaq was down 0.6%. Services activity, accounting for nearly 80% of U.S. private-sector gross domestic product, slipped more than expected, stoking fears that the pace of the economic recovery is running out of steam.

 

ANALYSIS

 

NZD and CAD are the cheapest G10 currencies – TDS

“The BOC, RBNZ and Norges provide the clearest contrast from the rest of its peers, though the broader G10 seems to be showing signs of FOMO. Most recently, the RBA has softened its dovish tone in spite of more restrictive lockdown measures amidst a COVID-19 outbreak and slow vaccinations.”

CHART

WTI Crude Oil – Weekly Candlesticks

Source: GKFX Prime Metatrader 4

WTISPOT has reversed strongly from a 7-year high above the $76.50, its September 2018 peak. A bearish signal would be confirmed with a bearish reversal pattern on the weekly candle chart. - Prepared by Trading Writers*

 

CALENDAR

 

*Times in GMT

 

Source

 

https://www.fxstreet.com/economic-calendar
https://www.investing.com/news/stock-market-news/sp-500-fell-on-fears-rapid-growth-nearing-peak-2551070
https://www.investing.com/news/commodities-news/oil-hits-7year-high-then-plunges-on-opec-disarray-2551032
https://www.reuters.com/article/global-precious/precious-gold-firms-near-1800-level-as-u-s-bond-yields-drop-idUSL3N2OI3A5
https://www.fxstreet.com/analysis/reserve-bank-of-australia-tiptoes-into-tapering-202107061529
https://www.fxstreet.com/analysis/eur-usd-forecast-dollar-surges-on-risk-aversion-202107061925
https://www.fxstreet.com/news/nzd-and-cad-are-the-cheapest-g10-currencies-tds-202107061332

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